Divorce brings major legal and financial changes, requiring updates to estate plans. Many people overlook this step, but failing to revise wills and other estate documents creates unintended consequences. Updating these documents ensures assets go to the right beneficiaries and prevents legal complications.
Updating wills and beneficiaries
A will determines how assets are distributed after death. In New Jersey, state law automatically revokes provisions that name an ex-spouse as a beneficiary in a will after divorce. However, this rule does not apply to assets such as trusts, life insurance policies, or retirement accounts, which require separate updates. These designations often take precedence over wills, making it crucial to review and update them to ensure assets are allocated according to current wishes.
Revising powers of attorney and healthcare directives
Many estate plans include financial and healthcare powers of attorney. These documents grant another person authority over financial or medical decisions if the named individual becomes incapacitated. If an ex-spouse remains listed, they may still control important decisions.
Creating new documents removes an ex-spouse from these roles and allows someone else to step in when necessary. Choosing a trusted person for these responsibilities ensures financial and medical matters align with personal preferences.
Protecting children’s inheritance
Divorced parents must review estate plans to protect their children’s inheritance. Without updates, an ex-spouse may gain control of assets meant for children. Establishing a trust with a chosen trustee secures financial stability and prevents mismanagement. Legal guardianship plans also need attention. If an ex-spouse cannot provide proper care, naming a preferred guardian in estate documents adds protection and clarity.
Failing to update estate plans may cause assets to go to unintended recipients. Proactively addressing these issues prevents future disputes and secures financial intentions.